The Big Read in short: Impact and implications of Malaysia's talent exodus to Singapore

SINGAPORE — Despite having a successful sales career, a workplace with supportive colleagues, and a stable relationship in Malaysia, Ms Anna Chin still felt something was missing.

And so, like many of her fellow compatriots with big dreams, the Malaysian started considering looking southwards: Singapore. 

“I got hold of an opportunity from a recruiter, which made me contemplate whether moving to Singapore would be a good decision. 

“Since Singapore and Malaysia have similar cultures, food, and languages, I thought it would be nice to have the opportunity to work overseas but in a place that doesn’t feel too different from home,” the Ipoh native told TODAY. 

Ms Chin, who holds a bachelor’s degree in science, thought she could benefit from the regional experience. She had expected to stay in Singapore for just a few years and then head home. 

Fast forward to six years later, the 33-year-old medical sales executive is now a Singapore permanent resident, happily married to a Singaporean, and is in the market for a flat as her forever home here. 

Considering how her life had taken an unexpected turn since she uprooted herself, Ms Chin said she plans to have children and settle down in Singapore for good. 

Ms Chin’s experience will surely resonate with the Malaysian diaspora residing and working in Singapore.

Last year, Malaysia's then Human Resources Minister V Sivakumar, said that as of 2022, 1.13 million out of 1.86 million Malaysians who migrated abroad were living in Singapore. 

While Singapore alone absorbs over 60 per cent of Malaysia’s diaspora, most of the remainder reside in countries located on the other side of the world, such as the United Kingdom and the United States. 

WHY IT MATTERS

A Malaysia governmental study conducted in 2022 and released on Feb 19 this year revealed that more than half of the Malaysian diaspora in Singapore have tertiary-level qualifications. 

Nearly three in four, or 74 per cent, are skilled and semi-skilled workers. 

On career planning, 62 per cent of the Malaysian diaspora in Singapore polled said they would continue working abroad, while the remainder voted for “no” or “not sure”. 

The study also found that most Malaysians tend to work in Singapore for at least three years, with 33.2 per cent staying for three to five years. 

A media statement released by the Malaysian authorities about the study warned of the “adverse effects” of the brain drain as skilled workers leave the country.

The study was conducted by the Department of Statistics Malaysia, an agency under the Prime Minister’s Department, and the Ministry of Economy. 

Recruitment agencies told TODAY that there is high demand in manufacturing, engineering, hospitality, healthcare and education sectors for Malaysian workers, as Singapore employers grapple with rising costs and manpower shortage. 

“Malaysian candidates are often considered the next-best alternative to other nationalities due to the culture and language, which are the closest to Singapore," said Mr Jim Wee, director of Singapore-based recruitment firm Nala Employment.

Singapore employers TODAY spoke to echoed these sentiments.

Mr Keith Tan, founder and chief executive officer of Crown Digital, a tech startup behind Singapore’s first robot barista Ella, said he had difficulties hiring locally due to the limited talent pool and high labour cost.

So he chose to hire from Malaysia. 

“A fresh graduate from NTU (Nanyang Technology University) demanded a pay of S$6,500. The high labour cost in Singapore makes business operations unsustainable, as workers often seek substantial pay increases after a year,” he said.

“I am looking to Malaysia because of a larger talent pool that does not come at a ‘premium’ cost... The top graduates are very similar to Singapore. (We speak the) same language, and we are neighbours,” he said.

THE BIG PICTURE

With Singapore being the preferred work destination for Malaysians looking to work abroad, Malaysia's chief statistician Mohd Uzir Mahidin said in his statement accompanying the government study that Malaysia needs to reframe the narrative around brain drain by turning it into "brain circulation".

“This shift in perspective means that the Malaysian diaspora will eventually return to Malaysia after a predetermined period, thereby contributing their acquired expertise and experiences back to the country,” he said.  

He said the brain drain issue is bound to have an adverse financial effect, especially considering a significant portion of those employed abroad had received their education in Malaysia. 

Malaysia and Singapore economists whom TODAY spoke to said that Malaysia’s brain drain has not reached a dire level yet, but the effects would still be felt in the long term. If left unchecked, the continuous loss of talent would eventually hamper economic growth. 

Sunway University economics professor Yeah Kim Leng said the outflow to Singapore had not adversely affected the labour market supply, as the country's manpower needs are still being met. 

He also said that Malaysia’s current “brain drain” may not be as bad as those experienced during the 1970s and 1980s due to its labour surplus.

“It is nevertheless concerning as the outflow of talents could dent the country’s structural upgrading to a higher value, innovation-driven and knowledge-based economy.”  

“In the longer term, the loss of talents could hamper the country’s aspiration to be an advanced and high-income nation,” said Dr Yeah, who is one of the five advisers to Malaysia’s Ministry of Finance.

Associate Professor Alwyn Lim, from the Singapore Management University, echoed Dr Yeah’s sentiments, saying that Malaysia’s population is “large enough” to mitigate any economic impact from migrating skilled workers. 

Malaysia has an estimated population of 33.7 million, compared with Singapore’s 5.92 million. 

However, he noted that the economic contributions of nearly a million Malaysian workers are not insignificant. 

“Many workers in Malaysia can perform lower-skilled work, so the more concerning trend would be higher-skilled Malaysians who choose to work in Singapore, or elsewhere, whose skills cannot be easily replaced and whose value contributions to the economy may be higher. 

“Higher-skilled Malaysian migration will probably continue to increase, and this will be a limitation for those domestic sectors in Malaysia that rely on the value contribution of higher-skilled Malaysians,” he said. 

While Singapore seems to be reaping the economic benefits from Malaysia’s flow of skilled and semi-skilled talent into the country, economists also told TODAY that not everything would be rosy in the long run as the two will need each other to do well in order to thrive. 

Associate Professor Walter Theseira from the Singapore University of Social Sciences said that with Malaysia's and Singapore's economies closely intertwined, the success of one economy often mirrors the success of the other. 

“Take, for instance, firms headquartered in Singapore that conduct operations in Malaysia. A weak Malaysian economy could directly impact their profitability.” 

Similarly, Mr Song Seng Wun, an economic adviser at financial service provider CGS International, said that due to the strong intra-regional trade in the Asean region and Singapore's heavy reliance on external trade, any external shock would quickly impact its economy.

“Currently, regional growth is resulting in higher-income jobs, increased disposable income, and greater demand for services. This growth fosters intra-regional trade and spillover effects,” he said. 

“To Singapore, it is especially important. We want everyone to do well, so they can spend a few hundred dollars here to go to the Taylor Swift concert, for example.” 

THE BOTTOMLINE

With all that has been said and done about Malaysia’s brain drain, the question remains: What will it take for the Malaysian diaspora to feel incentivised to return home and contribute to their country’s economy? 

Audit associate Phua Jia Herl, 25, who has worked in Singapore for almost two years, said Malaysia must first fix its political issues as political stability would attract more foreign investments. More can also be done to invest in infrastructure. 

Additionally, Mr Jonathan Lim, a 27-year-old engineer working in Singapore, said there is a need for the authorities to invest not only in infrastructure but also in public services and amenities to improve the overall quality of life in Malaysia. 

Mr Fahad Naeem, country director at recruitment agency Randstad Malaysia, said that when it comes to talent attraction and retention, government initiatives and employer efforts must go hand-in-hand.

He said this is especially important after Covid-19, with governments around the world introducing new talent attraction schemes to draw top global talent to work in their countries.

“These initiatives help enhance the overall strength of their local workforce and fill the talent pool gap. However, these initiatives must be complemented with attractive career opportunities that companies in Malaysia can offer. 

“Besides matching salary expectations, many talents are looking for employers that can offer positive employee experiences.” 

Conversely, Dr Lee Hwok Aun, senior fellow and co-coordinator of the Malaysia Studies Programme at Singapore's Iseas-Yusof Ishak Institute, said reducing the pay gap is paramount.

“Malaysians residing in Singapore and working in semi-skilled and low-skilled jobs can be attracted to return to Malaysia, but it will be a challenge and requires further study. 

“But I would hypothesise that the job offerings may not be very different across the countries — noting the main semi-skilled occupations in the study are clerical service work, machine operators, and service and sales workers — and hence earnings differential is the main factor,” he said.